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2004 Press Releases

June 21, 2004

FedEx Hails New US-China Accord

New agreement recognizes booming international trade between US and China

HONG KONG -- June 21, 2004 -- FedEx Corporation (NYSE:FDX) congratulates the United States and the People's Republic of China on the new aviation accord signed today by government officials from the two countries.

"This new agreement will boost international commerce," said David L. Cunningham, president, Asia Pacific for FedEx Express. "This marks a big step for China in sustaining its robust economic development by establishing stronger international trading links. These new flights will greatly enhance the ability to connect customers all over the world with the dynamic Chinese marketplace."

Approximately $60 billion worth of goods will leave China by air this year and another $61 billion worth of goods will enter the country by air to support the manufacturing sector and China's vibrant and growing consumer base. This number is expected to grow substantially thanks to these new air rights. US exports to China have grown by 75 percent over the last three years making the United States second only to Japan as China's top trading partner. FedEx volumes from Asia grew by 22 percent in the fiscal third quarter with China volumes up 55 percent year over year.

The agreement, which extends through 2010, provides 111 new weekly U.S.-China flights for U.S. cargo airlines. The U.S. Department of Transportation will be responsible for allocating the new flights, the first of which will be available in August.

The agreement will also facilitate the establishment of hub operations in China by granting firms that choose to do so full operational flexibility for air services at a hub. FedEx is looking at hub expansion opportunities in Asia, including consideration of the new Guangzhou Baiyun International Airport.

"This new bilateral agreement brings aviation liberalization into the 21st century," said Cunningham. "FedEx is looking forward to building upon the successes we’ve had over the last two decades in China and working with customers all around the world to deliver the benefits of international trade."

If awarded additional authorities, FedEx plans to initiate new round-the-world flights connecting China to businesses and nations in Europe, North and South America and Asia. FedEx will also explore the addition of air service to new Chinese cities along with more frequent flights to the FedEx AsiaOne network in Subic Bay, the Philippines and the FedEx EuroOne network based in Paris.

FedEx, the largest international express carrier in China, is celebrating 20 years of service in China. Since entering the market in 1984, FedEx has expanded its guaranteed service to cover more than 220 cities across China with plans to add 100 additional cities over the next few years. FedEx has 11 flights per week through three major gateways: Beijing, Shanghai and Shenzhen. In December, Shanghai became the headquarters for FedEx in China where it employs more than 1,800 people.

According to a recent US-China Business Council study, increased access for air express providers like FedEx would allow businesses to increase investments in China by nearly 5 percent, creating 800,000 new jobs and increasing U.S. exports by $8 billion to $12 billion over the next four years.

About FedEx
FedEx Corp. provides customers and businesses worldwide with the broadest portfolio of transportation, e-commerce and business services. With annual revenues of $25 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brands. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 240,000 employees and contractors to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit fedex.com.

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